Legislature weighs in on 15th Five-Year Plan
On Friday, the legislature (NPCSC) reviewed its research report examining critical policy issues to be tackled in the upcoming 15th Five-Year Plan (FYP) (2026-2030).
- The report will be passed to Party leadership and the State Council, as a key reference to use when drafting the new FYP.
Our three big, juicy takeaways:
First, the NPCSC said economic growth must be a top policy priority in the next FYP:
- “It is critical to place greater emphasis on faster economic growth and clear growth targets.”
Why that’s a big deal: The 14th FYP broke with tradition by not setting an annual GDP growth target, reflecting a step change from the previous “growth at all costs” mentality.
Second, the NPCSC wants policymakers to focus on strengthening total factor productivity (TFP):
- “China’s potential growth rate will hinge on improvements in TFP."
- “This requires breakthroughs in technology, innovative allocation of production factors, upgrading traditional industries, and building new forms of production relations.”
The NPCSC also called for the development of better metrics to measure China’s TFP.
Third, they urged a renewed focus on boosting the following three consumption ratios:
- Household disposable income as a share of national income
- Household consumption as a share of aggregate demand
- Fiscal spending devoted to people’s livelihoods
Get smart: If adopted in full, these proposals could significantly lift China’s medium-term growth trajectory by raising productivity and engineering long-term, sustainable consumption growth.
Get smarter: The legislature rarely takes positions at odds with Party or government priorities, and this report's unequivocal tone suggests broad consensus has already been formed on these issues.
- That means the 15th FYP will likely incorporate all of the above recommendations.